Look Inside: Economic Outlook Update—March


The Economic Outlook Update provides monthly and quarterly digests designed to give you the most defensible economic data available at your fingertips when you need it. This excerpt comes from the March 2023 monthly issue.

The Conference Board Coincident Economic Index (CEI) for the U.S. increased by 0.2% in March, to 110.2, after an increase of 0.2% in February. The CEI rose by 0.8% over the six-month period from September 2022 to March 2023, somewhat lower than the 1.0% rise over the prior six months. The CEI’s component indicators—payroll employment, personal income less transfer payments, manufacturing trade and sales, and industrial production—are included among the data used to determine recessions in the U.S.

The Conference Board Lagging Economic Index (LAG) for the U.S. decreased by 0.2% in March, to 118.3. The LAG is up 1.1% over the six-month period from September 2022 to March 2023, compared with growth of 4.4% over the
previous six months. Indicators included in the LAG are average unemployment duration, the ratio of manufacturing and trade inventories to sales, change in manufacturing labor costs per unit of output, average prime rates, commercial and industrial loans outstanding, the ratio of consumer installment credit outstanding to personal income, and the change in the Consumer Price Index for services.

The LEI is a leading American economic indicator intended to forecast future activity. The Conference Board, a nongovernmental organization, calculates the index from the values of 10 key variables:

  • Average weekly hours in manufacturing;
  • Average weekly initial claims for unemployment insurance;
  • Manufacturers’ new orders, consumer goods and materials;
  • Institute for Supply Management’s Index of New Orders;
  • Manufacturers’ new orders, nondefense capital goods excluding aircraft orders;
  • Building permits, new private housing units;
  • Stock prices, 500 common stocks;
  • Leading Credit Index;
  • Interest rate spread, 10-year Treasury bonds less federal funds; and
  • Average consumer expectations for business conditions.

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